A Moscow court on Thursday released French banker Philippe Delpal from jail into house arrest, days before a summit between the Russian and French presidents.
Delpal, a senior executive in investment firm Baring Vostok, was arrested in February together with company chief Michael Calvey and other suspects.
The arrests raised serious concerns among foreign investors in Russia.
At Moscow City court judge Anatoly Korolev ruled in favour of Delpal's appeal against last month's decision to extend his detention by another three months.
Delpal was released in the courtroom, an AFP correspondent said.
The surprise decision came ahead of talks between Russian President Vladimir Putin and his French counterpart Emmanuel Macron at a seaside retreat in southern France on Monday.
Calvey, Delpal, and other suspects are alleged to have defrauded Russia's Vostochny Bank of 2.5 billion rubles ($38.7 million) -- charges they deny as fabricated by a competitor.
At court, Delpal rejected the allegations and promised he would not leave Russia if freed from detention during the investigation.
"I am not implicated in this alleged crime," he said. "My life is in Moscow, fleeing is not an option because it will seem like I recognise my guilt."
His house arrest follows a similar decision for Calvey, a longtime investor in Russia whose fund gave a head-start to some of the country's top companies.
"We are pleased with this court decision, but we are not pleased with the whole situation and the baseless accusation," Delpal's lawyer Dmitry Kharitonov said.
"Philippe is concerned for his colleagues who are still in jail," he added.
Besides Calvey, an American citizen, and Delpal, the case includes three Russian suspects still behind bars.
- 'Fabricated case' -
Baring Vostok called on the courts to also free the three Russians, Vagan Abgaryan, Ivan Zyuzin and Maksim Vladimirov.
"Keeping (them) behind bars on a fabricated criminal case is nothing but pressure" by Baring Vostok's competitors in an ongoing corporate struggle, the fund said.
Baring Vostok is in a dispute with another Vostochny Bank shareholder, Artyom Avetisyan. Calvey has argued that the criminal case against his firm was fabricated to further his competitor's business interests.
Delpal has lived in Russia with his wife and two children for the last 15 years.
Speaking to AFP after Thursday's decision, Delpal's wife Cecile said the release is only a partial victory, as her husband remains a suspect who has not been cleared of charges.
"It's still a prison, gilded perhaps, in an apartment that's smaller than the one we have now, and he won't be able to go out, he will be locked in this flat," she said.
Cecile Delpal had long argued that Delpal should not be kept in jail. She bought a flat in Moscow to increase the chances of her husband being released to house arrest.
"They finally realised he has a flat," Delpal's second lawyer Varvara Knutova said of the prosecutors, adding that the family already owned the residence during the last hearing in July.
Macron urged Putin to release Delpal when the two met during the G20 summit in Japan in June, according to an aide to the French leader.